Bitcoin recovered in the second half of August, gaining almost 25% in just five days, rising from around $63,000 on August 16 to over $78,000 on the 21st of the same month. Two main factors contributed to this improvement: President Donald Trump asked Congress for legislation to clarify the regulatory framework for cryptocurrencies, and the US Treasury announced buybacks of long-term bonds to contain the rise in yields, which weakened the dollar and revived the so-called "debasing trade," benefiting BTC and gold.
The US software sector also recovered in late August. The IGV ETF, which replicates one of the main sector indices, gained about 16% over the month, compared to less than 3% for the S&P 500. The real acceleration happened in the last week of August, especially on the 27th, when it gained 7.74%. Companies like Salesforce, Workday, CrowdStrike, and ServiceNow helped change investor sentiment by posting better-than-expected earnings, countering the thesis that artificial intelligence would destroy demand for traditional software.
BTC and the software sector are affected by the same factors, including liquidity, real interest rates, the dollar, and risk appetite. However, BTC trades 24 hours a day, seven days a week, allowing it to incorporate sentiment changes more quickly than software stocks. This relationship works both ways, and BTC is also software, which explains the strong correlation between the two.
September is historically the worst month for US stocks, so the article recommends some caution.
